Nokia stock nosedives as Apple gains on market leader

Shares of Nokia tumbled this week, as the world's largest handset maker believes its market share will recede over the next year, while competitor Apple sees continued growth with the iPhone platform.

Analysts said that Nokia Oyj would not be able to keep up with Apple without an App Store-like alternative. As a result, Bloomberg said, Nokia's stock took its biggest hit in five years, dropping 15 percent, or $8.6 billion in value.

Though Nokia isn't as big a player in the U.S. as Apple, Research in Motion, or even Motorola, the global company commands a majority of the smartphone and cellphone market worldwide. Nokia estimated its smartphone market share was 41 percent for the second quarter of 2009, while the overall market share was 38 percent. In 2005, Nokia held 62 percent of the smartphone market.

Saying the sale of Nokia shares is an "easy call," Barron's said the company should be dominating the cell phone market, not losing ground.

"Nokia could eventually turn the discussion away from snazzy colors and back to the functions of a phone," the story reads. "The smartphone market was Nokia's game to lose, in other words. How humbling, then, for the company to see its buzz usurped by Apple's iPhone, Palm's Pre smartphone, and the latest models of BlackBerry from Research in Motion."